Parsons CEO Carey Smith

Within days of President Donald Trump’s January 2025 executive order eliminating diversity, equity and inclusion programs, Parsons Corp., a major federal contractor, quietly posted a statement on its website saying the company was shelving its award-winning program.

All DEI material was apparently off its website by Jan. 29, with the statement about the matter posted Feb. 2.

To comply with guidance from federal agencies, the company said it would “no longer have goals or incentives based on demographic representation and has removed all DEI pages and websites as of January 2025.”

The company did not announce the change with a press release.

Nor did DEI play a role in the company Feb. 26 quarterly results conference call for investors, when executives, including CEO Carey Smith, talked about how well its services were positioned to serve the administration spending priorities.

When asked about DEI last month, a spokesman emailed that Parsons “is required to comply with federal mandates related to DEI” and has “taken appropriate steps to remain compliant with the directive.”

Parsons, which is heavily dependent on federal government programs, was possibly among the first large engineering and construction contractors to roll back DEI programs that the administration is attacking as unconstitutional and illegal forms of discrimination.

Based in Chantilly, Va., Parsons relies significantly on revenue and profit from its Federal Solutions segment, based on work for U.S. government agencies, including the departments of defense and homeland security, and NASA. In the first quarter of 2025, the unit generated $842.5 million in revenue, about half of the company’s $1.6 billion total.

The firm’s Critical Infrastructure unit supports federally as well as state and municipal funded infrastructure projects, such as transportation and environmental remediation.

Smith has championed DEI since she joined Parsons in November 2016 and was tapped for her current roles in 2021 and 2022, respectively. “One of the first things I did was to stand up a diversity, equity, and inclusion program,” she said in a Society of Women Engineers interview last year. “I thought it was critically important to ensure that we have that 100% inclusive and engaged workforce across the company,” 

Among the most prominent parts of the program were statistics Parsons posted showing the percentage of minorities and women on its staff and in its management ranks The administration executive orders and subsequent guidance goes well beyond setting statistical goals, however, and explicitly prohibit offering any resource or making any decision based on race or gender.

As justification, administration lawyers say that DEI programs, rather than fulfilling the spirit instead violates civil rights law and the U.S. Constitution. 

On his first day in office, Trump issued executive orders 14173 and 14151, fulfilling his campaign pledge to end what he termed “Marxist” DEI policies. Order 14173 requires federal contractors to certify they do not operate “illegal” DEI programs and order 14151 mandates termination of “equity-related” contracts.

Challenges to DEI Orders

Opponents responded quickly.

One legal challenge, filed in federal court in Baltimore, is led by the National Association of Diversity Officers in Higher Education. It claims that the Trump orders—based on their vagueness—interfere with Congressional spending authority and have potential to inhibit free speech.

Another challenge, by Chicago Women in Trades, a group of union construction tradeswomen, prompted a federal judge in Chicago to issue a preliminary injunction on April 14. The judicial order blocks the certification requirement and allows the group’s federal grant funding to continue. In the injunction, the judge ruled that courts are likely to permanently overturn vague provisions in the orders, such as the certification, termination and enforcement requirements, for compromising free speech, lacking clarity and overreaching into private companies practice and policies

Sabrina Talukder, senior counsel at the Economic Justice Project at the Lawyers’ Committee for Civil Rights Under Law, said in a statement that the injunction will help Chicago Women in Trades challenge enforcement of Trump’s orders, which target “the very nature of” its mission and its critical work in “dismantling barriers for women, especially women of color, in the skilled trades.”

Despite his pre-election criticism of DEI, Trump executive orders were unexpectedly sweeping, says Thomas F. Powers, a professor of political science at Carthage College who has written extensively on diversity and affirmative action programs.

In a recent article, Powers wrote that Trump’s orders “have surprised even conservatives [including himself], who have tracked these issues closely.” In addition to firing commissioners of the Equal Employment Opportunity Commission to make it incapable of hampering his anti-DEI efforts, Trump eliminated all federal DEI enforcement staffers. 

Federal contractors are mostly going to comply, Powers predicted in an email. “A few big companies will resist, but most will not do anything to endanger their government income,” he said. “They were happy to follow the law when it made them do x, y, and z, but now they’ll go the other way.”

Business and advocacy groups had recognized Parsons’ program with numerous awards. These included the Human Rights Campaign Equality100 Award in 2023/2024, a spot on Forbes’ 2023 Best Employers for Diversity list and the Washington Business Journal Corporate Diversity Index award also in 2023.

To achieve its goals, Parson’s created  “employee business resource groups” for Black, Asian, women, military, Hispanic and LGBTQ2IA+ employees. Open to all employees, these groups facilitated professional development, networking and cultural awareness. Training and coaching were provided. Parsons named the overall program Cultivating a Responsible Enterprise program and issued annual reports of its work.

It remains unclear whether Parsons’ DEI staff are still employed or reassigned to new duties. 

Guidance for the Future 

To navigate the shifting DEI landscape, Denisha P. McKenzie, a partner at CDF Labor Law in Irvine, Calif., says that companies should monitor both state and local government requirements, work with legal counsel and audit and review their existing DEI policies and practices. 

The Trump DEI issues may not always “be consistent with state anti-discrimination laws and vice versa,” says McKenzie.

In blog posts, she and a co-author further advise decoupling DEI from equal employment opportunity efforts and training to distinguish between inclusive outreach and prohibited disparate treatment. 

To comply with DEI guidance from the administration’s Office of Personnel Management, she wrote that companies should ensure that affinity groups provide resources accessible to all, avoiding exclusive benefits.

Parsons Corp.’s programs had another important element. 

The company also made a practice of measuring and reporting makeup of its staff and new hires, a practice recently dropped by Starbucks, the cafe chain.

In 2023, Parsons reported that 29% of all employees and 38% of executive leadership were female. Among U.S employees, the company reported the percentages of its current staff as white (53%) Asian (23%) Black (10%) and Hispanic (11%). 

The breakdowns among managers were Asian (10.7%), Black (6.3%) and Hispanic (7.6%), a notable increase from 2019 levels. More than one out of three new hires were female, Parsons reported, with Asians comprising 22% of that grou, and Blacks and Hispanics at 13% each.

Hiring based on racial or ethnic percentages, according to guidance on DEI issued by the current U.S. Dept. of Justice and Equal Employment Opportunity Commission, violates Title VII of the 1964 Civil Rights Act. The guidance prohibits “employment action motivated – even in part – by an individual’s race, sex or other characteristic protected under Title VII,” according to analysis of the matter by law firm Jackson Walker.

Another law firm, Ogletree Deakins, noted in a recent analysis that the EEOC guidance prohibits “DEI-related disparate treatment” in hiring, firing, promotion, demotion, compensation and fringe benefits, as well as disparate treatment in training, mentorship, networking or interviews.

Exactly when the issues will be settled by courts is very much up in the air, but companies may believe it is in their best interest, as did Parsons, to make important decisions about what to do before all the legal issues are decided.

With additional reporting by Richard Korman